It gives me great pride to give UAW Local 435 workers the opportunity to partner with Fisker Automotive to create a greener America by building a plug-in hybrid car that will compete globally
So goes the line from Gary Casteel, the new Union boss for Fisker’s new Wilmington, Delaware plant at Automotive News [sub]. Why would the luxury EV startup hitch its wagon to the union that helped bring down Detroit? Was it a condition of GM’s sale of the plant where Pontiac Solstice/Saturn Sky were once built? Or does Fisker think that running a union shop might help bring in federal dross? Or are projected profit margins so strong that Fisker just doesn’t care? One thing’s for certain: though the UAW has agreed to a number of concessions over the past year, there’s a reason that most new US auto plants avoid union representation like the plague. From VW and Kia to Hybrid Kinetic Motors and Tesla, new US factories are being located in Southern states and California largely to escape the profit and productivity-sapping union. Either Fisker knows something that they don’t, or inviting the union into the new shop was a potential error of enormous magnitude.
Bad Karma.
This is my conspiracy theory, but V.P. Biden was a Senator from Delaware; Fisker is getting 42K federal tax break per car and Fisker originated in the homestate of Boxer and Polosi. All of the above politicians are surviving on union dime and vote. Why there is a surprise? Isn’t one hand washes another?
Yes, autonut. But in this case, it’s: if you use your other hand it feels like someone else.
Big mistake. Color them gone before they begin
Btw: in addition to Saturn’s L Series bomb, the plant’s current all stars [Solstice and Sky]got “least reliable in segment” recognition from Consumer’s Reports. Way to go UAW Local 435 !!!
Other than the fact that Fisker is getting this factory at a low low price, it seems like they are also buying 60+ years of UAW problems.
It’s like getting a $20 blow job then picking up a ton of STDs. Cheap, but long term problems.
The only hope is if Fisker can do a Saturn-esque working agreement with the UAW. Not sure that the UAW is that visionary.
This is just one of Fisker’s problems. Fisker gets its drivetrain from Quantum. Quantum — there’s a big enough problem for anybody.
Tesla Motors has its critics. I’m as big a Tesla critic as anyone. Still, they are way ahead of Fisker. No way Fisker makes it to market, in my view.
Remember this from the site posting guidelines:
“TTAC is not a soapbox from which to advance particular political views.”
And then we get this:
“…the profit and productivity-sapping union.” followed by the inevitable UAW/union bashing-in-general in the comments.
Go figure.
grog: Sorry, but that’s not a political statement. Sure it has political implications, but you’ll notice that the point of the article is aimed squarely at industry decision-making.
Instead of whining about bias, try explaining why going for a union shop makes business sense for Fisker. Seriously, that’s the difference between joining the conversation and drive-by-flaming.
[note to comment moderation team: please leave this exchange in place as an example of our policy in action… this is a learning process]
The UAW is not the problem, and it never has
been, even at GM, Ford, Chrysler, et. al. The
problem is company management, which allows
it suppliers (one can consider the UAW to be a
supplier) and employees to do things and behave
in ways which are detrimental to the best
interests of the company.
It’s time we stopped blaming the UAW for the
incompetence of management.
In other news just down I-95, the Univ. of Delaware is looking to buy the site/property of the closed Chrysler plant next to its campus in Newark:
http://www.udel.edu/udaily/2010/oct/chrysler102409.html
Wow! The mind reels!
– An investor by the name of Albert Gore Jr. is connected with this company that received a $523 million loan from the US Department of Energy.
– “This time is different,” Fisker has told the press. “We have a different business model. We’re assembling our cars from existing components.”
That’s exactly what John Delorean and Malcolm Bricklin said about their cars, built in factories, financed by governments.
– And now the UAW is gonna assemble these things? How’s that different than a Big 3 business plan?
I wonder … how much money did Thomas Edison get from the US government to fund his factory in West Orange, NJ? I’ll have to head up there and find out. My guess….$0.
Remind me, and I’ll get back to you on that….
Must be betting hoping for some free taxpayer dollars.
Must be hoping for some free taxpayer dollars.
I’ve heard that the $523 million we taxpayers are “loaning” Fisker will be dribbled out in installments. Better believe that at least this initial $18 million will be approved. Makes me sick.
“…the profit and productivity-sapping union.”
Maybe it’s not a political statement…but it is reflexive and lacking in nuance. The UAW…and management!…have evolved considerably over the years. At this point, whether or not the Wilmington plant is unionized will play a comparatively minor role in determining the success of the Fisker operation.
Boff: +1
Those that continually blame the UAW for problems at the manufacturers where their representation is present somehow choose to completely ignore the facts that the UAW workers had zero roles in determining which products were built or how they were built or of what quality components they were built from. Choosing instead to blame the UAW for every single malady.
It’s really not that difficult to look at the whole picture, give it a try. Was it the union’s fault for all of GM’s bad product and badge enginering decisions? Was it the union’s fault GM specified components that would last only for 80k miles? Was it the unions fault Diamler ran Chrysler into the ground and Cerberus gutted the R&D?
I understand the strong anti union bias continually expressed by many and I also understand that for the most part it is completely misplaced. Quite simply put, you can not hold the UAW responsible for the multitude of poor management decisions made over the years.
Blaming the local in Delaware for the “least reliable in segment” ratings of the Sky/Solstice completely ignores the quality of engineering, method of assembly and quality of parts dictated by management.
This news reinforces my belief that Tesla stands a much better chance of survival than Fisker. Of all the available plant space in the US, Fisker had to go and load the gun that will shoot them someday.
If Fisker is receiving a massive government loan and getting a federal tax break per vehicle, and the U.S. is broke and has to sell debt to other countries in order to stay afloat, then isn’t Fisker really a Chinese auto company?
There are two key reasons I could see to do this.
First: Fisker is purchasing an existing plant. Nobody knows the ins and outs of that place (and where the bodies are buried) like the people who worked there.
Secondly: training and experience. Fisker, relatively speaking, doesn’t know the first thing about building cars in scale. An experienced UAW work force does. When VW and Toyota came into the US, they had massive experience and could train a whole work force from scratch in their way of doing things. Not so with Fisker. To get the volume they want on the schedule they want, they need to hit the ground running, and contracting an already-trained work force is a big step.
I’m not “defending” the UAW, so don’t get all nasty on me. Just looking at this as a business decision form another perspective.
I will agree that management is the problem because they should be in charge, but the law favors the union and makes it difficult for management to do what needs to be done.
Well no wonder their keeping the union. My local news just reported on this. They called it a “$529 million dollar grant from the Obama administration.” Vote buying… past and present.
RE: mtymsi
You are correct that the UAW did not directly influence the manufacturers, but they certainly indirectly influenced them .
Consider the fact UAW workers cost more and produce less than their non-unionized counterparts. Workers are less flexible in what they produce, and are still paid even when not working. These reasons could explain why management made the tough decisions you mention above. Both are responsible for the downfall.
Having worked in both union and non-union environments, I think success is more dependent on excellent management.
That said, many good managers won’t even consider a unionized firm.
One thing’s for certain: though the UAW has agreed to a number of concessions over the past year, there’s a reason that most new US auto plants avoid union representation like the plague. From VW and Kia to Hybrid Kinetic Motors and Tesla, new US factories are being located in Southern states and California largely to escape the profit and productivity-sapping union.
Honda, Toyota, and Subaru also have non-union plants in rural areas of Ohio and Indiana while the GM, Ford, and Chrysler have union plants in the South. It appears that being rural and non-union is a larger factor in manufacturing success than being Southern. Honda is the largest manufacturing employer in Ohio.
Ohio Employers, see Table 2 page 9 of 21.
http://www.development.ohio.gov/research/files/B100000002.pdf
GeorgeB – the only reason the southern plants of GM Ford and Chrysler are union is that labor law requires new plants of unionized companies to be union as well, no matter where they are.
Nonunion companies will stay in right-to-work territory so that they can stay non-union.
Some questions to ask:
1. Is this a start-up subject to a new collective bargaining agreement?
2. If it is under the existing GM bargaining agreement do the same seniority rules, work rules and wage rates take effect?
3. Does the agreement provide for previously retired or bought-out employees return to work at their previous seniority and wage rates?
Personally I think there is more risk that reward with this opportunity.
Some interesting comments.
Put me on the side of those who think this is a big boondoggle funded with over $500 million of our money.
First, Fisker has never built a single car. So, of course, they have never sold one. Seeing Fisker use some of that taxpayer money to buy an $18 million plant brings back the worst memories of the dotcom boom and crash.
Second, the federal government has no business using taxpayer money to fund the earliest kind of startup. The 10 people at the Department of Energy have no experience in deciding whether business plans are “viable.” It’s a disgrace that those people are handing out billions of dollars.
Third, when an experienced carmaker abandons a plant, do you think an inexperienced carmaker, who has not made a single car, can make a go of that same plant?
Fourth, take a look at Fisker’s partner and part owner, Quantum Technologies. Quantum is a public company (but barely), so you can look at their financials. Horrific.
I think the bigger question is why did they purchase such a large plant, so far from their HQ? it has to be at least partly political. (note also the proximity not only to Joe Biden, but to DC) The only other thing i can think of is that paint shops to my knowledge have generally all been built in conjunction with large scalle (200,000 units/ year design) body and assembly plants. and you need to paint the vehicle.
They will start with a small volume almost hand assembpled and try to get volume up but its going to be hard to fill that plant. BTW we supplied alot of equipment to the plant years back and were generally pleased with the plant floor support
The Seattle Times is reporting that Boeing is putting the second 787 line in Charleston to get out from under the IAM union. It should be announced tomorrow.
It’s widely assumed the 737 follow-on will follow the 787 there.
The IAM’s failure to sign a 10-year no-strike clause mirrors their strike-at-a-drop-of-a-hat attitude. Boeing made it clear that was far too costly to the company and had to stop.
The IAM overplayed their hand.
My favorite local grocery store (part of one of the big national chains) is an all union worker shop. I’ve been going there for years and the people who work there are competent, friendly and hard working. Union or non-union is not what makes the big difference.
VW is kicking butt as a global automaker and is heavily unionized. Hyundai’s Korean plants are all unionized, and the Korean unions can be very agressive. Unions aren’t the problem.
This was probably a mistake for Fisker. It was also a mistake for GM. Chrysler had the foresight (ha ha) to locate next to the University of Delaware, which is one of those universities with way too much money (i.e. administrator salary packages are huge). Think of the University of Michigan’s purchase of the Pfizer plant in Ann Arbor – a HUGE purchase.
There is an advantage in having an experienced workforce for a start-up. I’ve been in the situation of new plant, new systems, new workforce, new product. It ain’t pretty.
You just have too many variables which make it very difficult to sort out the root cause of problems. Is the product design faulty? Or, is the production equipment faulty? Or, was the equipment just improperly set up? Or, are the workers using it wrong? Or, is this component right, but one of the other components it interfaces with wrong because of (see above).
Of course there were political reasons for the choice, and I firmly believe that (as with SAAB) the true purpose of the enterprise is to provide good salaries for the top executives as long as they can ride the government-paid electric-car gravy train.
However, I do understand the arguments for a seasoned workforce in an established plant.
The morning news says it is all but a done deal.
Boeing was not looking to reduce wages ($28 in Seattle, $14 in Charleston), benefits (very generous), or anything beyond four words “No strikes for ten years” to stop the horrible cost and disruption a strike involves. Use binding arbitration to resolve conflicts.
Jobs for union members, their kids and grandkids will vanish. Taxes that pay for schools, emergency services, the city, county, and state infrastructure will disappear. Commercial activity in our stores and shops will plunge. The rank-and-file will see a hugely negative impact on their living across the board.
The IAM union leadership is totally detached from the reality of what best benefits the union members on the shop floor. Indeed, the union IS the problem.
Edward Niedermeyer:
This site is 10min from me.
Its not like me to be positive here…
But Im happy its happening.
I also heard that a local dealership is picking up a dealership.
http://www.delawareonline.com/apps/pbcs.dll/article?AID=/200910290345/NEWS/910290335
Some colorful metaphors in the first few comments here…
The purchase of this plant (solely for the lower cost, yet to be revealed Nina) seems premature to me given that Fisker has yet to deliver the Valmet manufactured Karma or prove to have any chance at being profitable. I don’t think the manufacturing on the Nina is expected to start until 2012 at this rate. Why even make a statement about the labor force at this point?
At the same time, Tesla’s purchase of a southern California plant for the Model S seems long overdue.